Mealey's Securities

  • December 13, 2019

    Defendants Tell 2nd Circuit They Are Not Subject To Section 16(b) Liability

    NEW YORK — A federal district court erred in denying a summary judgment motion filed by defendants in a shareholder derivative lawsuit alleging that they violated federal securities law reporting requirements as beneficial owners of more than 10 percent of a company’s stock because they were not subject to liability under Section 16(b) of the Securities Exchange Act of 1934, the defendants argue in a Dec. 10 appellant brief filed in the Second Circuit U.S. Court of Appeals (Brad Packer v. Raging Capital Management LLC, et al., No. 19-2703, 2nd Cir.).

  • December 13, 2019

    Investors: Dismissal Of Securities Claims, Failure To Add Plaintiff Erroneous

    BOSTON — A federal district court erred in dismissing a lead plaintiff’s class action complaint for lack of standing to pursue federal securities law claims against a medical device maker and others stemming from the device maker’s alleged failure to disclose U.S. Food and Drug Administration concerns over a spinal-cord injury device the company had sought to market, shareholders argue in a recent appellant brief filed in the First Circuit U.S. Court of Appeals  (Wang Yan, et al. v. ReWalk Robotics Ltd., et al., No. 19-1614, 1st Cir.).

  • December 12, 2019

    High Court Review Of ‘Obtaining Property’ Meaning Sought In Securities Suit

    WASHINGTON, D.C. — U.S. Supreme Court review of a federal circuit court’s finding of no reversible error in a federal district court’s evidentiary rulings and jury instructions in the criminal trial of a medical device company’s former CEO for his alleged role in a fraudulent channel-stuffing scheme is warranted to cure a split among the circuits as to the meaning of “obtaining property” in the fraud statutes, the former CEO argues in a Nov. 21 petition for writ of certiorari filed in the U.S. Supreme Court (Michael Baker v. United States of America, No. 19-667, U.S. Sup., 2019 U.S. S. Ct. Briefs LEXIS 6764).

  • December 12, 2019

    Panel: Evidence Supporting Conviction In Investment Fraud Scheme Sufficient

    CINCINNATI — A Sixth Circuit U.S. Court of Appeals panel on Dec. 10 ruled that evidence provided at the trial of a man convicted on charges that he bilked investors out of millions of dollars as part of a multipart investment fraud scheme was sufficient to convict him on charges of conspiracy to commit wire, mail and securities fraud (United States of America v. Ronnie C. Rodgers, No. 19-5065, 6th Cir., 2019 U.S. App. LEXIS 36500).

  • December 11, 2019

    Magistrate To Decide Lead Plaintiff In Securities Class Against DuPont Spinoff

    WILMINGTON, Del. — A federal judge in Delaware on Dec. 10 referred to a magistrate judge motions pending in a securities class action against the Chemours Co. related to allegations that it concealed the true nature of its liabilities related to litigation it faces for injuries caused by exposure to perfluorooctanoic acid, also called C8, among other per- and polyfluoroalkyl substances (PFAS).  The specific motions pertain to which party should be the lead plaintiff in the case (In re:  The Chemours Company Securities Litigation, No. 19-1911, D. Del.).

  • December 11, 2019

    Dismissal Of Claims In Poultry Company Follow-On Shareholder Lawsuit Affirmed

    NEW YORK — A federal district court did not err in dismissing federal securities law claims in an investor class action against poultry processing company and certain of its executive officers stemming from their alleged involvement in two antitrust conspiracies designed to drive up the price of broiler chickens because in stating their claims, shareholders failed to plead facts in support of the underlying antitrust activity with the requisite particularity, a Second Circuit U.S. Court of Appeals panel ruled Dec. 10 (Gordon Gamm, et al. v. Sanderson Farms Inc., et al., No. 18-0284, 2nd Cir., 2019 U.S. App. LEXIS 36498).

  • December 11, 2019

    Investor:  Court Erred In Dismissing ‘Abandoned’ Claim In Stock-Drop Suit

    NEW YORK — A federal district court erred in dismissing federal securities law claims in an investor class action against a mining company and two of its former senior executives that alleged that the defendants misled investors about the financial profitability of an African coal mining license acquisition despite a “contrary ruling” in a related Securities and Exchange Commission action, a lead plaintiff argues in a Dec. 10 appellant brief filed in the Second Circuit U.S. Court of Appeals (Anton Colbert v. Rio Tinto plc, et al., No. 19-2711, 2nd Cir.).

  • December 11, 2019

    Justice Rules In Favor Of Exxon In New York AG’s Climate Change Securities Suit

    NEW YORK — The Office of the Attorney General (AG) of New York failed to sufficiently plead that Exxon Mobil Corp. engaged in a years-long scheme to misrepresent the risk of climate change regulations to investors in violation of the Martin Act and other New York law, a New York justice ruled Dec. 10 (People of the State of New York v. Exxon Mobil Corp., No. 452044/2018, N.Y. Sup., New York Co.).

  • December 10, 2019

    Pair Of Securities Class Actions Remanded To State Court In Light Of Cyan

    KNOXVILLE, Tenn. — A federal judge in Tennessee on Dec. 6 overturned his previous ruling denying remand of a pair of related securities class action lawsuits to state court, holding that in light of the U.S. Supreme Court’s ruling in Cyan Inc. v. Beaver County Employees Retirement Fund, the actions were improperly removed under the Securities Litigation Uniform Standards Act (SLUSA) (Kenneth Gaynor, et al. v. Deloy Miller, et al., No. 15-545, E.D. Tenn.).

  • December 10, 2019

    District Court’s Disgorgement Order Upheld By 10th Circuit On Appeal

    DENVER — A federal district court did not err in granting the Securities and Exchange Commission prejudgment interest in addition to the more than $5 million in disgorgement it sought for a defendant’s alleged violations of the Investment Company Act (ICA) and federal securities laws as part of a securities fraud scheme, a 10th Circuit U.S. Court of Appeals panel ruled Dec. 6 in affirming (Securities and Exchange Commission v. Charles R. Kokesh, No. 19-2000, 10th Cir., 2019 U.S. App. LEXIS 36296).

  • December 09, 2019

    Financial Institutions Not Victims Under MVRA, 2nd Circuit Panel Rules

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Dec. 3 ruled that although evidence provided by government prosecutors in a criminal trial against two alleged securities fraudsters was sufficient and a federal judge’s jury instruction and jury charges were not erroneous, a district court abused its discretion in ordering the defendants to pay more than $18 million in restitution pursuant to the Mandatory Victims Restitution Act of 1996 (MVRA) because the defendants did not proximately cause the financial losses totaling that amount (United States v. Pablo Calderon, et al., Nos. 17-1956, 17-1969, 17-2844 & 17-2866, 2nd Cir., 2019 U.S. App. LEXIS 35827).

  • December 06, 2019

    Institutional Investors Seek Lead Plaintiff Role In Fracking Shareholder Case

    SAN ANTONIO — A group of institutional investors in a hydraulic fracturing services company on Nov. 22 filed a brief in Texas federal court contending that they should be appointed as the lead plaintiff in a securities class action lawsuit against the company in which the shareholders say the company violated federal law when it failed to disclose certain issues in documents it filed with the Securities and Exchange Commission in preparation for an initial public offering (IPO) (Richard Logan v. ProPetro Holding Corp., et al., No. 19-217, W.D. Texas).

  • December 05, 2019

    Evidence Admitted In Securities Fraudster’s Trial Found To Be Sufficient

    PHILADELPHIA — A federal district court did not abuse its discretion in admitting evidence in a trial against an alleged securities fraudster showing that he life an extravagant lifestyle because the court’s analysis of the evidence was not in the abstract as the fraudster argues on appeal, a Third Circuit U.S. Court of Appeals panel ruled Dec. 2 (United States v. Nicholas Lattanzio, No. 18-2682, 3rd Cir., 2019 U.S. App. LEXIS 35888).

  • December 05, 2019

    Preliminary Approval Of $19.75M Securities Class Action Settlement Granted

    SANTA ANA, Calif. — A federal judge in California on Dec. 4 granted preliminary approval of a $19.75 million securities class action settlement against a financial institution stemming from alleged misrepresentations it made concealing its connection to a convicted fraudster and Ponzi scheme operator (In re Banc of California Securities Litigation, No. 17-0118, C.D. Calif., 2019 U.S. Dist. LEXIS 145361).

  • December 05, 2019

    Tobacco Company Hit With Shareholder Class Action Over $12.8B JUUL Investment

    BROOKLYN, N.Y. — A shareholder sued a manufacturer of cigarettes and smokeless products on Dec. 2 in New York federal court, alleging that the company and two of its senior executives violated federal securities laws by failing to conduct sufficient due diligence before making a nearly $13 billion investment in e-vapor products manufacturer JUUL Labs Inc. (Patrick F. Cipolla v. Altria Group Inc., et al., No. 19-6774, E.D. N.Y.).

  • December 03, 2019

    Exxon Investor Files Derivative Suit Over Climate Change Risk Concealment

    TRENTON, N.J. — Several current and former Exxon Mobil Corp. senior executives breached their fiduciary duty by concealing the material risks that climate change posed to the gas and oil company’s business in order to allow Exxon to increase short-term profits and artificially inflate its stock price, assets and revenue, an investor alleges in a shareholder derivative complaint filed Dec. 2 in a New Jersey federal court (City of Birmingham Retirement and Relief System v. Rex W. Tillerson, et al., No. 19-20949, D. N.J.).

  • December 03, 2019

    Exxon Removes Climate Change Misrepresentation Lawsuit To Federal Court

    BOSTON — Removal of a lawsuit brought by Massachusetts Attorney General Maura Healey against Exxon Mobil Corp. for alleged violations of the state’s consumer protection law based on its misrepresentations to consumers and investors concealing the risks of fossil fuel-driven climate change to Exxon’s business is warranted because although Healey’s claims are brought under state law, the complaint actually states claims that deal with federal law, Exxon argues in a Nov. 29 removal notice filed in Massachusetts federal court (Commonwealth of Massachusetts v. Exxon Mobil Corp., No. 19-12430, D. Mass.).

  • December 02, 2019

    Panel:  Appellant Failed To Address Jurisdictional Ground For Dismissal

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on Nov. 25 affirmed a federal district court’s dismissal of a pro se complaint seeking review of a Financial Industry Regulatory Authority (FINRA) order, ruling that because the pro se plaintiff failed to properly address the jurisdictional ground on which his complaint was dismissed (Sam Balabon, et al. v. Richard Ketchum, et al., No. 18-50269, 5th Cir., 2019 U.S. App. LEXIS 35456).

  • November 27, 2019

    1st Circuit Panel Upholds Insider-Trading Securities Fraud Conviction

    BOSTON — A federal jury properly found a real estate investor guilty of insider-trading securities fraud based on inside information he received from his wife, a corporate insider, and provided to two friends because government prosecutors presented sufficient evidence that the defendant shared a “history, pattern, or practice of sharing confidences” with his wife, a First Circuit U.S. Court of Appeals panel ruled Nov. 22 (United States v. Amit Kanodia, Nos. 17-1137 and 17-1590, 1st Cir.).

  • November 26, 2019

    Judge Approves $1.15M Settlement In Stock Drop Suit Against Drug Maker

    LOS ANGELES — A federal judge in California on Nov. 19 granted final approval of a $1.15 million securities class action settlement against a drug maker, certain of its current and former officers and directors and others over their alleged involvement in an illegal stock-pumping scheme (Arthur Kaye IRA FCC, et al. v. ImmunoCellular Therapeutics Ltd., et al., No. 17-3250, C.D. Calif., 2019 U.S. Dist. LEXIS 201657).